Wyclef Jean's Foundation Questionable Spending
The CBS4 I-Team has uncovered questions about one of the leading charities that has set fundraising records for Haiti relief.
The Wyclef Jean foundation raised more than one million dollars in the first 24 hours after the earthquake. But tonight I-Team investigator Stephen Stock learned of questionable spending practices by Wyclef Jean's foundation, and documents that raise questions about how much of people's donations actually got to those in need.
You can find a link to a charity navigator that ranks charities by clicking here.
The pictures out of Haiti have tugged at the heartstrings and prompted the opening of wallets of donors around the world.
Here in the United States, in many circles musician Wyclef Jean has become the face of charitable donations for his native country Haiti through his Yele Foundation.
"We were able to raise one million dollars in one day on behalf of our client Yele Haiti," said Albert Angel, who works with Jean's foundation.
Albert Angel is CEO for "Give on the Go" and Chairman of Redfish Media. Both are Miami Beach based technology companies that are hired by charities to raise money through text messaging and other high tech means.
One of Angel's clients is Wyclef Jean's Yele Foundation.
"I think it (text message fundraising) is indicative of a trend to come," Angel said. "But it also reflects the power of the medium (texting and computer based fundraising.)"
Modern methods or not, charities like the Yele Foundation, must, by federal law, file a document called a 990 every year. The CBS4 I-Team reviewed the 990s for Wyclef Jean's foundation--the last one filed in 2007.
You can read all the 990 filed by the Wyclef Jean Foundation for 2007 (Yele Foundation), made public, by clicking here.
The documents raise questions about how much money REALLY goes to Haiti and those in need. The foundation's 2006 990 shows it received a little $1,087,664 in contributions or donations. Of that, the 2006 990 shows $516,493 was spent on salaries, rent, consultant and professional fees, promotion and public relations' costs. Only $324,500 actually went to programs. In other words, to those in Haiti.
And the IRS 990 shows that some of the money paid for rent and other things like concerts went to pay companies owned by Wyclef Jean himself, as well as other foundation directors.
In 2007, the foundation reported receiving $79,126 in contributions or donations. It spent more than twice that much, $174,626, on consultants, professional and benefit fees and promotion and PR costs.
"Doesn't that raise a red flag and should the donor beware?" asked CBS4 I-Team investigator Stephen Stock.
"Yes," said Albert Angel. "I would think that the level of scrutiny that you're applying here is very healthy. And that donors should be very choosy who they donate with."
"But I'm not ready to make the conclusion that their (Jean's Foundation's) expenditures were out of sync," said Angel. "Because the programming expenditures are for the benefit of their cause."
Daniella Levine, President and Founder of the Human Resources Coalition, says donors should be wary of any charity that spend so much on something other than those in need.
"Some charities have to spend so much money to raise that dollar that it might not be worth your while to make the investment," Levine told the CBS4 I-Team.
Experts say an efficient charity spends at most 30% of the money it gets on things like salaries, promotions and overhead. Several experts warn donors to be aware of those charities that spend more than half the money they raise on things other than the cause for which the charity is meant.
"I think any place between 10% and 30% is kind of considered within the range of acceptability," Levine said.
I-Team investigator Stephen Stock asked: "If you a charitable giver, and the charity spends more than 50 percent on the dollar on other things other than programming you should be worried?"
"Absolutely," said Levine. "And also non-profits should have independent financial audits."
Experts say when in doubt, donors should turn to charities and foundations with a long track record of spending little on overhead and most of their money on those in need.
Read the Wyclef Jean Foundation 990 for 2006 by clicking here.
Groups like CARE, Doctors Without Borders, Save the Children and the US Fund for UNICEF.
You can find a link to a charity navigator that ranks charities by clicking here.
Wyclef Jean's foundation, based in New York, did not return our e-mails and the foundation's phones would not allow us to leave messages seeking comment.
Click Here to read the Wyclef Jean Foundation 990 Form for 2005.
